The Undercover Economist on Happiness

So, money does not buy happiness. Or does it? “In every society, at any point in time, richer people are happier,” points out Will Wilkinson, a policy analyst at the Cato Institute in Washington D.C., who runs a blog on happiness research and public policy. “But that in itself doesn't tell you much about the relationship between money and happiness.”

Some results are predictable enough: Work is miserable, and commuting is worse. Others are not so obvious. For instance, praying is fun, but looking after the kids is not. Spending time with your friends is one of the most enjoyable things you can do, but spending time with your spouse is merely OK. In fact, parents or other relatives turn out to make more enjoyable company than the supposed love of your life.

What is perfectly clear, though, is that socializing with anyone except your boss makes you feel good. Sex is best of all. This is handy advice at last. But what if you are having sex with your boss? Whereof economists cannot speak, we must remain silent.

Layard's advice in the article is good. I doubt Oswald was really trying to say that if you're depressed, wait until you're older. It is worth noting that satisfaction in about every life domain other than the financial declines as we age. So don't think this “money can't buy you happiness” schtick means you can go chintzy on the 401K. When your knees break down, your eyes start to go, half your friends have died, and your kids never call anymore, money is the main thing buying you happiness. (See Easterlin. Head right for the graphs in the appendix.)